Proposal to scrap air passenger duty faces delay

PLANS to replace air passenger duty in Scotland may have to be delayed, the Finance Secretary has told MSPs.

Air departure tax (ADT) was due to come into force in April 2018, with Scottish ministers pledging to cut the levy by 50 per cent by the end of this Parliament, ahead of abolishing the charge altogether “when resources allow’’.

However, Derek Mackay said its introduction could be pushed back because proposals to continue with an exemption for passengers who fly from Highlands and Islands airports require EU approval under state aid rules.

He said discussions were ongoing with UK ministers to resolve the matter, but described their response so far as “disappointing”.

Opposition parties accused Mr Mackay of using the issue of EU approval as a means of kicking his policy to cut the tax “into the long grass”. The Tories, who back a cut to air tax, said ministers were “trying to weasel out” of their commitment. The Greens said the Finance Secretary had come up with a “technical pretext to save his blushes”.

Mr Mackay had previously told MSPs the Scottish Government was of the view that, in order for the Highlands and Islands exemption to be compliant with EU law, it must be notified for approval to the EU Commission by the UK Government, as the EU member state.

However he said the Treasury had “serious concerns” about making such an approach, and would require Scottish ministers to “accept full liability” for all risks, including the historic operation of the tax, if the EU does not approve the exemption.